Okuzeka
Finance & Banking vocabulary · Corporate Finance

Working capital

Meaning in finance & banking, with examples

nounCommon term

In finance & banking, working capital means: The money a business has available for its daily operations, calculated as current assets minus current liabilities.

In Turkish: işletme sermayesi, çalışma sermayesi

How it is used

Used by credit analysts and company treasurers. Companies need, manage or finance working capital; banks offer working capital loans and credit lines. Changes in stock, receivables and payables drive working capital needs.

Example sentences

  1. The company needs more working capital because its customers now pay in 90 days.

  2. We offered the client a 12-month working capital loan.

Common collocations

  • working capital loan
  • working capital needs
  • net working capital
  • manage working capital
  • cash flowThe movement of money into and out of a business over a period. Positive cash flow means more money is coming in than going out.
  • liquidityHow easily an asset can be turned into cash without losing value, or how much cash and easily sold assets a bank or company has to meet its payments.
  • capitalMoney and other financial resources used to start and run a business; for banks, the owners' funds that absorb losses and protect depositors.
  • SMEShort for small and medium-sized enterprise: a company below certain limits for staff and turnover. In the EU, SMEs have fewer than 250 employees.

More terms: Corporate Finance

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This page explains English vocabulary for learners. It is not financial advice.